The British Rolls-Royce brings in 2 billion kilos with the rights concern

© Reuters. At the Bombardier booth at the National Business Aviation Association (NBAA) exhibition in Las Vegas, employees apply a Rolls-Royce sticker to the engine of a Bombardier Global 6500 business jet


LONDON (Reuters) – British engineering firm Rolls-Royce (OTC 🙂 raised £ 2 billion ($ 2.6 billion) on Thursday from a rights issue to bolster its pandemic-hit finances after shareholders voted for 94% of the new shares and the rest were sold through a trunk placement.

Airlines pay Rolls-Royce based on the number of hours their engines have been flying. As a result, the company's finances have come under increasing pressure after COVID-19 suspended travel earlier this year.

The capital increase opens up new debt options for the company, including £ 2 billion from a bond issued in October and a £ 1 billion bank loan as part of a total liquidity package of £ 5 billion.

The vast majority of shareholders were in favor of the capital increase, but the results showed that there was some disagreement over the issue of one of the UK's best-known industrial names, with 6% of newly issued shares not originally being included.

The company said in a statement that including 10 underwriting banks Citigroup (NYSE :), Goldman Sachs (NYSE 🙂 and Morgan Stanley (NYSE 🙂 had successfully gained subscribers for the rest of the stocks.

With the new liquidity package, CEO Warren East Rolls-Royce can take COVID-19 out of circulation and save £ 1.3 billion in costs, cut 9,000 jobs and close factories to cope with lower demand from airline customers working with The company's engines fly on Boeing (NYSE 🙂 787s and Airbus 350s.

The company's shares were down 8% at 90p at 1240 GMT. In the rump placement, the new shares were sold at a price of 90 pence per share, the company said.

The stock had a roller coaster week. Thanks to news of a vaccine, stocks rose over 90% at one point on Monday but closed 10% on Wednesday. They have lost 61% of their value in the year to date.

Disclaimer: Fusion Media would like to remind you that the information contained on this website is not necessarily real-time or accurate. All CFDs (stocks, indices, futures) and forex prices are not provided by exchanges, but by market makers. As a result, prices may not be accurate and may differ from the actual market price. This means that the prices are indicative and not suitable for trading purposes. Therefore, Fusion Media is not responsible for any trading losses you may suffer from using this data.

Fusion Media or anyone involved with Fusion Media assumes no liability for any loss or damage caused by reliance on the information such as data, offers, charts and buy / sell signals contained on this website. Please be fully informed about the risks and costs associated with trading in the financial markets. This is one of the riskiest forms of investment possible.

Related Articles